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UNDER PRESSURE: DEPOSIT BETAS - Utah ...
ISSUE 2   2019

    OFFICIAL PUBLICATION OF THE UTAH BANKERS ASSOCIATION

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Because no two clients
        are ever the same.                                          TM

                        Understanding
                    what makes you unique.®
                               www.swlaw.com

          BRIAN D. CUNNINGHAM | 801.257.1954 | BCUNNINGHAM@SWLAW.COM
   GATEWAY TOWER WEST | 15 WEST SOUTH TEMPLE | SUITE 1200 | SALT LAKE CITY, UT 84101
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            PHOENIX | RENO | SALT LAKE CITY | TUCSON | WASHINGTON, D.C.
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UBA Board of Directors
2019/2020

CHAIRMAN
Kay B. Hall
EVP & CFO
Zions Bank
Salt Lake City

VICE CHAIRMAN
Kristin B. Dittmer
EVO & CFO

                                                                           8                                                                                      20
EnerBank USA
Salt Lake City

2ND VICE
CHAIRMAN
Eric Schmutz
President & CEO
State Bank of
Southern Utah
Cedar City

IMMEDIATE PAST
CHAIRMAN
Douglas L. DeFries
President & CEO
Bank of Utah
Ogden

COMMUNITY
BANK ADVISORY
COUNCIL CHAIR
N. George Daines
Chairman & CEO

                                                                            2                                                                                         14 Introducing Yext, The New Way
Cache Valley Bank
Logan

INDUSTRIAL
                                                                                         The Bottom Line
BANK ADVISORY
COUNCIL CHAIR
                                                                                         By Howard Headlee, President, Utah 		                                                        to Put Your Financial Institution
Paul F. Thome                                                                            Bankers Association                                                                          on the Map
                                                                            4	UBA New Officers and Board
President
Sallie Mae Bank
Salt Lake City                                                                                                                                                                        By Rachel Scheuerman, Director -
REGIONAL                                                                                                                                                                              Engagement Solutions, Harland Clarke

                                                                                                                                                                      16
BANK ADVISORY                                                                            Members 2019-2020

                                                                            5	Chairman’s Farewell
COUNCIL CHAIR
Matthew D. Bloye
Region Bank President                                                                                                                                                                111th Annual Utah Bankers
Wells Fargo
Salt Lake City                                                                                                                                                                        Association Convention

                                                                            6	Compliance Corner: Much To Do
PRESIDENT

                                                                                                                                                                      20
Howard M. Headlee
President
Utah Bankers Association
Salt Lake City                                                                                                                                                                        Top 5 Cecl Things To Remember
                                                                                         About Private Flood                                                                          By Jeff Goldstein SVP, Regional
BOARD MEMBERS                                                                            By Daniela Clark Compliance Alliance                                                         Manager, PCBB

                                                                            8	Leadership Succession
Kelly M. Barnett                      Mark A. Herman

                                                                                                                                                                      22
President                             Market President
WebBank                               U.S. Bank
Salt Lake City                        Salt Lake City                                                                                                                                  Relief for Community Banks in
                                                                                         By Dave Forsyth , Product Manager,
Jan M. Bergeson
Utah Market Leader
                                      Kisty Morris
                                      Executive Director                                                                                                                              the Competition for Deposits
Ally Bank                             Morgan Stanley Bank                                EnerBank USA
                                                                                                                                                                                      By Bryan Harper, Regional Director at

                                                                            9
Sandy                                 Salt Lake City
                                                                                                                                                                                      Promontory Interfinancial Network, LLC
                                                                                         Reframing the Credit Union Debate
                                                                                                                                                                      24	
Robert M. Bowen                       Wade E. Newman
President & CEO                       President & COO
Brighton Bank                         Celtic Bank
Salt Lake City                        Salt Lake City                                     By Rob Nichols, President and CEO, 		                                           Bankers Kudos
Robert W. Carpenter                   Mark Packard                                       American Bankers Association

                                                                         10                                                                                           28	
Executive Director &                  President
Region Manager                        Central Bank
JPMorgan Chase
Salt Lake City
                                      Provo
                                                                                         Under Pressure: Deposit Betas                                                   Bankers on the Move
Deborah Culhane
                                      Frank K. Stepan
                                      Managing Director &
                                                                                         By Matt Harris, Senior Vice President,

                                                                                                                                                                      30	
President & CEO                       Vice Chairman
Optum Bank                            UBS Bank                                           The Baker Group

                                                                         12 Washington Visit
Salt Lake City                        Salt Lake City
                                                                                                                                                                         Associate Members
Terry L. Grant                        Len E. Williams
Utah Market President                 President & CEO

                                                                                                                                                                      32
KeyBank                               People’s Utah Bancorp
Salt Lake City                        American Fork

                                                                         13 Women in Banking                                                                                         Congratulations Graduates of
                                                                                                                                                                                      the Credit Analyst Development
                                                                                                                                                                                      Program

The Utah Bankers Association represents fifty regional,
community and industrial banks throughout Utah and is the
voice for Utah’s banking industry and its employees.

©2019 Utah Bankers Association | The newsLINK Group, LLC. All rights reserved. Utah Banker is published four times each year by The newsLINK Group, LLC for Utah Bankers Association and is the official publication for this association. The
information contained in this publication is intended to provide general information for review, consideration and banker education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance,
it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of Utah Bankers Association,
its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. Utah Banker is a collective work and as such some
articles are submitted by authors that are independent of Utah Bankers Association. While Utah Bankers Association encourages a first print policy, in cases where this is not possible, every effort has been made to comply with any known reprint
guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at: 855.747.4003.

      Issue 2. 2019                                                                                                                                                                                                                                     1
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The Bottom Line                                                               of prohibitively costly regulations.
                                                                                                    How is this good for consumers?
                      By Howard Headlee, President, Utah Bankers Association
                                                                                                    It’s not, of course, and that is what
                                                                                                    makes this debate about socialism so
                                                                                                    revealing. It exposes the true motives
                                                                                                    of those who are trying to re-engineer
                                                                                                    the U.S. economy by changing its
                                                                                                    heart, the U.S. banking system.

                                                                                                    Capitalism is founded on the premise
                                                                                                    that everyone can work and safely
                                                                                                    accumulate capital and then wisely
                                                                                                    put their personal capital at risk and
                                                                                                    if they do so prudently, they are re-
                                                                                                    warded with a return of, and a return
                                                                                                    on that capital. Everyone can build
                                                                                                    wealth by investing in their commu-
                                                                                                    nities and the dreams of others.

                                                                                                    Banks are at the heart of that process,
                                                                                                    so it isn’t a surprise that those who
                                                                                                    hate capitalism, hate banks. This
                                                                                                    is not new. Banks have been under
                                                                                                    attack for many years. How many
                                                                                                    times have you heard people fall into
                                                                                                    the trap of criticizing bank profits,
                                                                                                    somehow suggesting that banks
                                                                                                    should perform their critical function
                                                                                                    of allocating capital with a blind eye
                                                                                                    to returns on capital.

                                                                                                    Capital follows returns. People won’t
                                                                                                    put their capital at risk without a
                                                                                                    fair return. If bankers don’t properly
                                                                                                    invest capital, they lose access to it.
                                                                                                    When they invest well, they earn a
                                                                                                    profit and then they have more capital
                                                                                                    to drive more growth. Everyone wins.

                                                                                                    Fortunately for Utah, we have some
                                                                                                    of the best bankers in the country.
                                                                                                    As measured by total assets, amaz-

    J
                                                                                                    ingly, Utah is one of the largest
        ust when you think our political debate     to banking. This is because banks are the       banking states in America. People
        can’t get any more absurd, a fevered        heart of any capitalist ecosystem, so it is     are coming from all over the world
        debate between the proponents of            not a surprise to me to see that many of the    to create and invest in a Utah bank.
    socialism and pretty much every other           same individuals promoting socialism are        We could not have the best economy
    rational person on the planet erupts.           the same individuals that have been trying to   in the world without great bankers
    I’m not going use this space to engage in       destroy the U.S. banking system.                and profitable banks.
    that debate, in my view the actual results
                                                    Elizabeth Warren has been leading this          So next time you hear someone crit-
    of each system over many years in a num-
                                                    charge under the guise of consumer              icizing banks, their profits and their
    ber of independent instances is so obvious
    that anyone who still questions which           protection. But look at the actual results      success, carefully consider the source.
    system is best for people and families is not   of the policies she has been promoting.         Most likely you will find someone
    rational anyway.                                We have lost more than 1,500 commu-             who knowingly, or perhaps even un-
                                                    nity based financial institutions. These        knowingly, are promoting principles
    But I do think that the debate is very          banks that had little or nothing to do with     of socialism. Based upon decades of
    enlightening and can give us insights into      the economic crisis yet they have been          success, wealth creation, growth and
    many other issues, especially when it comes     crushed under the weight of a mountain          prosperity, we welcome the debate! n

2                                                                                                                            www.uba.org
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Let your voice
be heard !              (without revealing your identity)
      By taking our survey you are providing anonymous feedback that will be used to hold
         regulators accountable. More than 2000 bankers have already participated.

                      Take a stand. Take the survey.
   Take the RFI survey at www.allbankers.org
                                   *

*RFI = Regulatory Feedback Initiative                               Utah Bankers Association
                                                                       a proud member of
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Introducing the 2019-2020
    UBA Board of Directors and Board Members

    BOARD OF DIRECTORS
            Chairman                                President                    Mark A. Herman
            Kay B. Hall                             Howard M. Headlee            Market President
            EVP & CFO                               President                    U.S. Bank
            Zions Bank                              Utah Bankers Association     Salt Lake City
            Salt Lake City                          Salt Lake City

             Vice Chairman                 BOARD MEMBERS                         Kisty Morris
             Kristin B. Dittmer                   Kelly M. Barnett               Executive Director
             EVP & CFO                            President and CEO              Morgan Stanley Bank
             EnerBank USA                         WebBank                        Salt Lake City
             Salt Lake City                       Salt Lake City

             2nd Vice Chairman                      Jan M. Bergeson              Wade E. Newman
             Eric Schmutz                           CRA Officer/Utah Market      President & COO
             President & CEO                        Leader                       Celtic Bank
             State Bank of Southern Utah            Ally Bank                    Salt Lake City
             Cedar City                             Sandy

                                                    Robert M. Bowen
             Immediate Past Chairman                President & CEO              Mark Packard
             Douglas L. DeFries                     Brighton Bank                President
             President & CEO                        Salt Lake City               Central Bank
             Bank of Utah                                                        Provo
             Ogden

                                                    Robert W. Carpenter
             Community Bank Advisory                Executive Director, Region   Frank K. Stepan
             Council Chair                          Manager                      Managing Director &
             N. George Daines                       JPMorgan Chase               Vice Chairman
             Chairman & CEO                         Salt Lake City               UBS Bank
             Cache Valley Bank                                                   Salt Lake City
             Logan
                                                    Deborah Culhane
             Industrial Bank Advisory               President & CEO              Len E. Williams
             Council Chair                          Optum Bank                   President & CEO
             Paul F. Thome                          Salt Lake City               People’s Utah Bancorp
             President                                                           American Fork
             Sallie Mae Bank
             Salt Lake City
                                                    Terry L. Grant
             Regional Bank Advisory                 Utah Market President
             Council Chair                          KeyBank
             Matthew D. Bloye                       Salt Lake City
             Region Bank President
             Wells Fargo
             Salt Lake City

4                                                                                               www.uba.org
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Chairman’s Fairwell
       A
                              s a member of the Utah Bankers            better know their customer. This change has elicited many positive
                              Association (UBA) for the past            ways by banks to more efficiently comply with the requirements. A
                              thirty-four years, it has been a          national database has been proposed and is generally backed by all
                        pleasure to serve as its chairman in            UBA members. Additional efforts and support will be committed
                        2018 and 2019. The UBA represents the           to this advocacy effort in the coming years.
                        voice and interests of all types of banks
                        in our wonderful state. The beauty of           Core Banking Technology Advancement
                        our association is that banks with di-          The advancements in fintech continue to accelerate in banking.
                        verse interests and customer bases can          In recent years speeding up and enhancing the payment process
                        come together often and strong. We all          has become paramount. This year a significant advancement in
                        have a common goal of customer advo-            real time payment possibilities and the related “true” real time
cacy and transparency of financial actions. This vision has lead        person-to-person transfers hit center stage. The effort at UBA
the UBA to several compelling initiatives during the past year.         has been to keep all members abreast of the latest developments
                                                                        in the real time payments space. Each UBA member will ad-
Public Policy Environment                                               dress the best approach in this critical part of the core function
The appointed leaders at most bank regulatory agencies have             of a bank.
been replaced in the past two years. I am happy to note that
these appointees have made significant progress in reforming the        There is an effort underway at ABA to improve relationships
oversight at banks. It has become encouraging again to have a di-       with core banking software processors. During the year, ABA
alogue at the agencies instead of just the rhetoric received in prior   made a strategic investment in a new core processor – Finx-
years. The ability to make significant headway toward regulatory        act. This marks a new way UBA members can benefit from
relief is still a ways off, but headed in a much better direction.      the national pressure being exerted on the existing major core
                                                                        banking software processors. These core processors must
The future in Congress is more clouded by the current envi-
                                                                        keep their products updated and negotiate reasonably with the
ronment with mixed control. The efforts to establish a rapport
                                                                        banking industry.
and respect for banking with our new representatives (McAd-
ams, Romney) has been compelling and interesting. The solid
                                                                        Importance of Emerging Leaders
support by most of the rest of our Congressional delegation is
                                                                        The success of banking has always relied on development of
something that is admired by many other states. I’m currently
                                                                        future leaders to understand and implement proper direction at
serving on the American Bankers Association (ABA) Commu-
                                                                        their banks. The UBA embarked on enhancing future leader-
nity Bank Council and associated with over 100 CEO’s from
                                                                        ship potential through its emerging leaders program introduced
across the country. Utah has a great reputation within that
                                                                        several years ago. This year many emerging leaders have been
group due to the past and current banking leaders that have
                                                                        present at advocacy events and within leadership sessions. The
served in leadership roles at the ABA and Howard Headlee with
the state association group.                                            vision and perspective of these individuals is impressive. Such
                                                                        efforts and opportunities must continually evolve to meet the
Advocacy Efforts                                                        future challenges in banking.
Several specific efforts to give input on future regulatory
oversight have been of great interest to the entire UBA. The            This year an initiative to understand the breath of what bankers
cannabis banking struggles of other states came to the forefront        do and the depth of knowledge required was embarked at the
after this winter’s Utah legislature action. Efforts to solve the       UBA. Surveys and interviews have been conducted and a plan
banking dilemma of a legal process in Utah versus an illegal            formulated to assist banks to attract and retain the diverse talent
federal activity is just the type of dilemma that can be solved         needed in today’s environment.
and that the UBA excels in.
                                                                        I would like to thank all bankers that have served on UBA
The Office of the Controller of the Currency has proposed               committees or attended UBA events in the past year. It is a won-
Community Reinvestment Act (CRA) reform recently. This is               derful sight to see a group of bankers gathered for a common
an area that has huge implications for almost all UBA member            purpose. There is truly strength in numbers and I’m grateful
banks. The CRA committee of the UBA is an impressive group              for the associations I have enjoyed throughout my career. All of
of individuals that understand the issues of new regulatory over-       this activity would not be possible without the dedicated staff
sight. Meaningful enhancements and lobbying by this group               at UBA. Howard Headlee leads us in the right direction, and
continues to assist the effort to craft reasonable outcomes for         Becky Wilkes and the rest of the staff have transitioned nicely
this mandate.                                                           after the retirement of Wendy Holloway at the end of 2018.

Bank Secrecy Act (BSA) requirements implemented a year ago to           Let’s continue the positive potential for Utah banks as we con-
identify beneficial ownership has increased the burden for banks to     tinue to work together! n

Issue 2. 2019                                                                                                                                 5
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COMPLIANCE CORNER

    MUCH TO DO ABOUT PRIVATE FLOOD
    By Daniela Clark

    T
          he long awaited final private flood rule was, at last, jointly   regulation. The specific sentence is: “This policy meets the
          released on February 20, 2019 by the OCC, FRB, FDIC,             definition of private f lood insurance contained in 42 U.S.C.
          FCA, and NCUA (“the Agencies”) six long years after the          4012a(b)(7) and the corresponding regulation.”
    first proposed rule. The first proposed rule that was released in
    October 2013 introduced the requirements for accepting private         If the Compliance Aid sentence is not included in the policy,
    flood insurance that meets the definition under the Biggert-Wa-        then unfortunately, the bank is required to look through the
    ters Act. Three years later, in November 2016, the Agencies            policy to determine if the policy meets the definition of private
    revised and reproposed the private flood rule.                         flood insurance. In order for the policy to meet the definition
                                                                           of private flood insurance it must be (1) issued by an insurer or
    There are some key differences in the final private flood rule         surplus insurer that is licensed by the state regulatory agency in
    from the 2016 proposal. The final rule requires the bank to            which the property is located, (2) be at least as broad as NFIP,
    accept private flood that meets the definition of private flood        including deductibles, exclusions, and conditions, (3) require a
    insurance under the rule, without exception. However, it also          45 written notice for non-renewal or cancellation, (4) include
    allows the bank a safe harbor if the policy contains the Compli-       information regarding insurance available under NFIP, (5) have
    ance Aid sentence.                                                     a clause similar to SFIP regarding mortgage interest, (6) include
                                                                           a one year statute of limitations provision, and (7) include
    The Compliance Aid sentence (sometimes referred to as the              cancellation provisions that are as restrictive as those in SFIP.
    magic sentence) is a sentence in the policy that provides safe         If this seems vague or confusing, Compliance Alliance has a
    harbor to the bank where the bank is permitted to rely on the          checklist available in our Flood toolkit that may be helpful to
    Compliance Aid sentence that states that the policy meets              the bank: https://www.compliancealliance.com/find-a-tool/
    the definition of private f lood insurance under the law and           by-toolkit/flood

6                                                                                                                              www.uba.org
UNDER PRESSURE: DEPOSIT BETAS - Utah ...
The final rule also does not address the situation where the Compliance Aid
     sentence is in the policy as it is written in the rule; however, immediately after
    the Compliance Aid sentence, the policy contradicts the sentence in such a way
    that it makes it clear to the bank that the policy does not meet the definition of
                                  private flood insurance.

Unfortunately, the final rule does not specifically address when      The rule also includes specific requirements related to when
the Compliance Aid sentence is not 100 percent correct or varies      a bank may accept a mutual aid society policy under discre-
from the sentence in the rule. However, it would be most conser-      tionary acceptance. In order for the society to be considered
vative to not rely on the sentence if it is not 100 percent correct   a mutual aid society such that the rule would allow the bank
or varies from the sentence in the regulation. It would be most       to accept the policy, (1) the members of the group must share
conservative to go through the policy to be sure that it meets the    a religious, charitable, educational, or fraternal bond, (2) the
definition of private flood insurance as it is defined in the rule.   group must have an agreement to cover losses due to property
                                                                      damage, including for flooding, and (3) the group must have a
The final rule also does not address the situation where the          demonstrated history of fulfilling the terms of the agreements
Compliance Aid sentence is in the policy as it is written in the      for flooding. Unfortunately, the final rule does not expand on
rule; however, immediately after the Compliance Aid sentence,         mutual aid societies and new guidance related to the new final
the policy contradicts the sentence in such a way that it makes it    rule has not yet been released by the agencies. The bank will
clear to the bank that the policy does not meet the definition of     need to thoroughly document its analysis and determination
private flood insurance. Again, it would be most conservative to      regarding any mutual aid society policies.
not rely on the sentence if it is not 100 percent correct. It would
be most conservative to go through the policy and document ex-        The bank will need to begin looking at these issues and mak-
actly why the policy does not meet the definition of private flood    ing policy decisions soon, as the final rule is effective July 1,
insurance as it is defined in the rule.                               2019. It applies when a building secures the loan and it is in a
                                                                      Special Flood Hazard Area (often referred to a SFHA, Flood
One question that we have gotten on the hotline quite a bit is        Zone, High Risk Flood Zone, or 100-year plan), even if it is
if the bank may review the policy to determine if it meets the        only taken in an abundance of caution during a MIRE event
definition private flood insurance, even if it does contain the       (Making, increasing, renewing, or extending). If the building
Compliance Aid sentence. There is not a prohibition in doing          does not secure the loan, it is specifically carved out of the col-
that. However, there is a possibility that the sentence could be      lateral or the loan is secured by something else, like a CD, then
there, the bank goes through the policy, and then finds that          the flood rule does not apply. If the building is not in a SFHA,
the policy in fact does not meet the definition of private flood      then flood insurance is not required, but may be a safety or
insurance, in which case the bank can deny it. However, the           soundness consideration.
bank would want to thoroughly document this practice in the
bank’s internal policy and procedures as well as in the loan file     If the bank would like to read more about the final private flood
regarding why the bank found that the policy did not meet the         rule, Compliance Alliance has a summary of the final rule avail-
definition of private flood insurance even though the policy          able in our flood toolkit. Also, in the toolkit is a template flood
included the Compliance Aid sentence that states that the policy      policy that has been updated for the new final rule, as well as
does meet the definition.                                             the checklist that was mentioned earlier. https://www.complian-
                                                                      cealliance.com/find-a-tool/by-toolkit/flood n
However, even if the policy does not meet the definition of
private flood insurance under the definition in the rule, the
                                                                                        Daniela Clark serves as Associate General Counsel for
bank may still accept the policy, subject to certain restrictions.                      Compliance Alliance. She holds a Bachelor’s in Business
In order for the bank to accept the policy under discretionary                          Administration with a concentration in Management
                                                                                        from the University of Texas at Arlington, AA-
acceptance, the policy must (1) meet the minimum coverage                               CSB. Daniela received her JD from Texas A&M Univer-
amounts, (2) be issued by a license insurer, (3) include both the                       sity School of Law and is a licensed attorney in the State
mortgage or and the mortgagee as loss payees, and (4) provide                           of Texas. Daniela brings to Compliance Alliance her
                                                                                        knowledge of consumer finance compliance.
sufficient protection, considering safety and soundness, and the
bank can document this in writing.

Issue 2. 2019                                                                                                                                        7
UNDER PRESSURE: DEPOSIT BETAS - Utah ...
Leadership Succession
                                                 By Dave Forsyth, Product Manager, EnerBank USA

    A
          nne M. Mulcahy, former Chairperson and CEO of Xerox,           to the foundation of the EBL position us for further success as
          once provided her insight on leadership succession when        Leslie Nuon (Zions Bank) and Ben Browning (Bank of Utah)
          she said, “One of the things we often miss in succession       pick up where Leslie and I left off. They are well-prepared
    planning is that it should be gradual and thoughtful, with lots of   continue to improve the EBL and make this transition “almost
    sharing of information and knowledge and perspective, so that it’s   a non-event”.
    almost a non-event when it happens.” An organization without
    a solid plan for succession can have an unnecessarily disjointed     Lastly, we established a social media presence for better commu-
    period in their history as new leadership takes time to get up to    nication and connection. Follow us by searching for Emerging
    speed. Ideally, the next leader has been prepared and selected       Bank Leaders of Utah on LinkedIn, Instagram, and Facebook. n
    (even if just privately) well before their time comes. Each leader
    takes their turn leading and improving the organization while
    setting up the next leader to take the organization even further                       Dave Forsyth serves as the Chair of the Emerging Bank
    than the last. This is obviously easier said than done.                                Leaders of Utah. He is a Product Manager for software
                                                                                           products at EnerBank USA. He holds a master’s degree
                                                                                           in finance from the University of Utah. He also holds
    Emerging Bank Leaders (“EBL”) helps with leadership succession                         an honors bachelor’s degree in finance with a minor in
                                                                                           anthropology from the University of Utah
    at your institution by developing the banking leaders of today and
    tomorrow. The EBL in Utah accomplishes this by providing:

    •   Three-month mentoring programs where those look-
        ing for greater insight can learn from people in diverse
        disciplines at banks with different business models from
        across the industry.
    •   Experience advocating for the industry alongside other se-
        nior banking leaders by working with members of Congress              Welcoming Zachary Bassett
        at both the state and national level.                                 as the new VP/Relationship Manager for Utah Members
    •   Organizational leadership and governance experience
        through participation on the EBL Board and EBL Execu-
                                                                                                         Zachary has been with FHLB
        tive Committee.
    •   Leadership insight lunches with senior leaders from across                                       Des Moines since 2013,
        the industry.                                                                                    serving as a Senior Collateral
        Public speaking opportunities such as our 5-minute Ignite                                        Review Analyst. He brings 13
        presentations at our annual EBL conference.                                                      years of banking experience
    •   Socializing at events such as our annual Top Golf event.                                         to his new role, having served
    •   Collaboration through an online community.                                                       in a variety of capacities.
    •   Reaching out to college students to educate them about
        the industry.
    •   Service in the community.

    This year we have focused on solidifying the foundation of the             In addition to our member support team, FHLB Des
    EBL by establishing leadership succession plans for the organi-            Moines has powerful analytical tools to assist your
    zation as a whole and across our four committees (Marketing,
                                                                               institution in evaluating strategic funding decisions
    Mentoring, Outreach, and Events). We also better established
                                                                                    and mitigating unwanted interest rate risk.
    a regional presence in St. George and the surrounding cities in
    Southern Utah. That was primarily driven by the leadership of
    Clay Denos of Rock Canyon Bank. Recently, the UBA upgraded                           These tools are available at:
    their website and mobile app through the Collaborate plat-
    form as well as remodeled offices including new technological
                                                                              www.fhlbdm.com/products-strategies
    equipment. We are excited for the modern experiences this will
    enable for the UBA and the EBL. Together, these improvements

8                                                                                                                                   www.uba.org
Reframing the Credit Union Debate
By Rob Nichols, President and CEO, American Bankers Association

F
    or too long, banks with legitimate concerns about unbri-
    dled credit union growth have been portrayed as Goliath
    picking on David. The truth is that in many states, a credit
union is one of the largest local financial institutions, outrank-
ing most of the state’s community banks in size.

But rather than trying to convince policymakers or the public
that central casting got it all wrong – that it’s big credit unions
that are harming small banks – ABA, with guidance from our
long-standing banker Credit Union Task Force, has made a
deliberate effort in the past two years to raise the level of aware-
ness about credit union policy issues and excesses among third
parties and the media.

We believe this strategy is effectively reframing the debate from
banks vs. credit unions to credit unions vs. taxpayers, a crucial
step toward drawing more oversight of the industry.

More people now are questioning whether credit unions,
which enjoy a generous federal tax exemption, are earning this         ABA does not disagree. We have long maintained that there is
benefit. Even major media outlets like The Wall Street Journal,        a role for credit unions in our financial services ecosystem. But
The New York Times and National Public Radio have turned               that role has become blurred as some credit unions increasingly
a critical eye to credit union practices – running stories on the      look and act like banks, even purchasing them.
lax enforcement of meaningful membership restrictions and an
expose of the industry’s taxi medallion loans, which imposed           It’s past time for policymakers to take a truly critical look at
predatory terms on thousands of taxi drivers and drove some            today’s $1.5 trillion credit union industry to ensure the Ameri-
credit unions out of business.                                         can taxpayer is not being cheated. We have called for just such
                                                                       scrutiny, urging NCUA in particular to conduct a “top-to-bottom
The most recent criticism comes from a respected independent           assessment” of whether the industry is meeting its targeted, statu-
research firm – Federal Financial Analytics, run by veteran            tory mission to serve households of “small means.” We have also
banking policy analyst Karen Shaw Petrou who has a strong              asked the NCUA Inspector General to review the regulator’s role
interest in matters of economic inclusion. ABA commissioned            in allowing credit unions to lose sight of their mission.
the study but had no editorial control over Federal Financial
Analytics’ research and conclusions.                                   In the meantime, ABA is continuing to challenge NCUA in the
                                                                       courts. Our lawsuit against NCUA over its expansive field of
Petrou’s study assessed not only the extent to which credit            membership rule is still active; we won two of four counts, are
unions meet their mission, but also how their federal regulator        appealing the other two, and a decision could come any day.
judges and enforces it. The paper found, among other things,
that credit union members are disproportionately from middle-          But we are excited to move our case to the court of public
and upper-income households, that the National Credit Union            opinion—and even more encouraged that the response isn’t a
Administration maintains no data on credit unions’ effective-          knee-jerk dismissal of our grievances as competitive sour grapes.
ness at providing financial services to people of “small means,”       Others are now seeing the serious implications of credit unions’
and that its definition of “low-income” is far more expansive          mission failures and lax oversight, and such awareness is crucial
than that used by other federal agencies.                              to achieving a level playing field. n

This lack of credit union mission compliance is the rub for
Petrou. “Sometimes the question of credit-union mission                                   E-mail Rob Nichols at nichols@aba.com.
compliance is seen as an us-versus-them battle between bankers
and credit unions,” she said. “This study readily acknowledges
the vital role credit unions can and should play in household
financial services – its goal is not to question credit unions, but
to remind policy-makers of their vital mission to ensure that
taxpayer-benefits received are credit-union benefits earned.”

Issue 2. 2019                                                                                                                                9
Deposit Betas
     By Matt Harris, CFA, Senior Vice President at The Baker Group

     I
         n science class we were taught that pressure is the applica-        Those feelings were in large part confirmed as banks calculated
         tion of force against an object. As bankers, we are constantly      deposit rates ranging less than 20 percent on their deposit rates
         experiencing this phenomenon with our depositors and                versus historic cycles usually ranging from 30-45 percent.
     rates. Today, presidents, CFOs and other risk managers across
     the country are sharpening their pencils and focusing on how            Many industry experts have studied why deposit betas have
     important their institution’s deposit rates impact net interest         been subdued this time versus past cycles. Some reasons
     margin and bottom-line. In Asset Liability Committee (ALCO)             include: the massive amount of bank reserves versus histori-
     lingo, the term “beta” is used to describe the relationship             cal levels, increased regulation, higher non-interest cost, and
     between deposit rates versus their sensitivity to the change in         management’s desire to maintain margins levels consistent with
     short-term interest rates.                                              what they’ve experienced over the last two decades. Customers
                                                                             are starting to pay more attention since the four hikes last year
     It’s been a while, but since December 2015 the Federal Open             and the fact that competitive rates are now above inflation rates
     Market Committee (FOMC) has increased the federal funds tar-            around 2 percent, implying a pickup in real earning. Toss in
     get rate nine times totaling 225 basis points to the current level of   growing funding needs and changing customer demand compe-
     2.5 percent. Up until last year, the general feeling was that deposit   tition (think Fin Tech) and that gives you the perfect recipe for
     betas were much lower when compared to previous rate cycles.            higher deposit betas.

10                                                                                                                                www.uba.org
The review and analysis of               (most often with lower balance tiers).         what actually occurs in reality. That’s why
deposit rates and their projected    •   Focus on certain demographics that ex-         as prudent risk managers we should always
betas is never a one-size-fits-all       hibit low deposit beta behavior.               periodically stress test our assumptions with
approach. Variables such as          •   Increase duration of client relationships      worst-case scenarios. If your bank hasn’t been
geography and market com-                through training/education/incentives.         talking about implementing these concepts,
petition heavily weigh on the        •   Cross-selling strategies and customer          now is definitely the time to do so! Taking
sensitivity of these rates. New          loyalty programs.                              time to revisit these interest rate risk concepts,
York and the Southeast region                                                           making adjustments to your ALM model, and
tend to have the highest deposit     If your bank experienced higher betas earlier      stress testing are all the right ingredients to a
betas while areas in the Mid-        in the cycle, how much will it take for compe-     successful exam visit from your regulators. n
west have the lowest. In more        tition to catch up? If your bank is smaller than
competitive markets, we’re be-       market competition, will it lose market share?
                                     If loan demand is picking up, how long can the                              Matt Harris, CFA, is Senior
ginning to see certain products                                                                                  Vice President at The Baker
being tied to short-term interest    bank support these growth levels with these                                 Group. He started with the
rates (for example 50 percent        higher funding costs? As you and your bank                                  firm in 2007 as an intern while
                                                                                                                 attending the University of
of prime rate). By tying your        think about these questions, remember that                                  Texas-Austin, where he earned
non-maturity deposit rates to        there are many reasons, other than interest                                 a Bachelor of Arts degree in
                                                                                                                 government and economics.
short-term rates, you remove         rate, why customers choose to deposit their                                 In 2010, he joined the firm’s
flexibility to manage these          funds at the bank. Studies have determined            Financial Strategies Group at the home office in
rates, which can be challenging      that consumers place higher value on attri-           Oklahoma City, where he works directly with bank-
                                                                                           ers, examiners, and auditors regarding fixed income
in a rising rate environment.        butes like convenience, service, availability,        portfolio analysis and asset/liability management.
Another factor is institution        and technology over deposit rate pricing. Also        Harris is also involved in the development and testing
                                                                                           of Baker ’s proprietary bond accounting and interest
size; community banks have           keep in mind that assumptions, by definition,         rate risk software. Contact: 405-415-7251, mharris@
been slower than regional and        have limitations since they can vary from             GoBaker.com.
big banks, but will likely have
to play catch up if they lagged
over the last three years.

One interesting trend we are
seeing is banks spending more
time improving and incentiv-
izing their deposit operations
department. While it’s long
been the norm to establish pro-
grams like this in the lending
area, these individuals at the
bank are vital in providing
low-cost funding, which can
then be deployed in earning
assets such as loans or secu-
rities. ALCOs are rolling out
new customer loyalty pro-
grams and improving customer
relationship building training
with office administrators and
controllers at their commercial
accounts. Below are some oth-
er useful ideas to help manage
your betas.

Ideas to Lower Your Deposit
Betas
Limit rate advertisements,
focus on quality of service and
products offered.

•   Tier certain deposit prod-
    ucts and manage their rate
    changes separately, creat-
    ing some low beta products

Issue 2. 2019                                                                                                                                       11
Washington Visit

                        M
                                ore than 20 Utah            held with all six members of
                                bankers, including a        Utah’s Congressional Delega-
                                contingency of Emerg-       tion: Senators Mike Lee and
                        ing Bank Leaders, were among        Mitt Romney; Congressmen
                        the 1,300 plus bankers from         Rob Bishop, Chris Stewart,
                        across the country who visited      John Curtis and Ben McAd-
                        the nation’s capital as part of     ams. Bankers discussed with
                        the 2019 ABA Washington             each member key issues facing
                        Summit in April.                    the banking industry and
                                                            legislative priorities, including:
                        Business sessions provided at-      BSA/AML reform, CECL,
                        tendees the opportunity to hear     cannabis banking, data securi-
                        directly from key policymak-        ty/privacy, and credit unions.
                        ers who oversee the banking
                        sector, such as Senate Banking      The ABA Washington Summit
                        Committee Chairman Mike             is an annual event that pro-
                        Crapo and House Financial           vides bankers across America
                        Services Committee Chair-           an important opportunity to
                        woman Maxine Waters, as             engage with policymakers and
                        well as top banking regulators,     advocate on Capitol Hill. The
                        economists, political strategists   Summit also includes forums
                        and ABA leadership.                 for Women in Banking and
                                                            Emerging Leaders. Next year’s
                        Utah bankers travelled to Cap-      Washington Summit will be
                        itol Hill where meetings were       held March 23-25, 2020. n

12                                                                             www.uba.org
Women in Banking

O
     n April 11, 250 bankers gathered at The Gar-
     den Place at Heritage Park for the 14th Annual
     Women in Banking Conference, a Development
Conference for Banking Professionals. This year’s
theme, “Own Your Success”, celebrated achievement
and underscored the important role women play in the
banking industry today.

The packed agenda kicked off with an amazing pre-
sentation by Dr. Teresa Martinez, Associate Professor
of Sociology at the University of Utah. She taught us
how to practice empathy and inclusion in the workplace.
Following Dr. Martinez, we were able to hear from
Merrilee Buchanan, Founder and Principle Consultant
at Villa Leadership. We learned how to reach our goals
through “Big Dot Little Dot Goal Mapping”. During
lunch we were honored to hear from Dr. Noelle Cockett,
President of Utah State University, were she shared her
journey in life and how she got to where she is today.
Following Dr. Cockett, we had the chance to learn
and see the “Evolution of Banking” from the talented
Jeffery Thomas of Zions Bank. Our last speaker was
Olympic Silver Medalist, Noelle Pikus Pace. We were
taught that, “Where You Look is Where You Go.” Plus,
back by popular demand, attendees were motivated and
entertained by four of their peers during some brilliant,
fast-paced “Utah Bankers Ignite” sessions. All of our
speakers left us with inspirational messages to help us,
“Own our Success” both in our personal and profession-
al lives.

The rich history of this conference continues to provide
a unique opportunity for those in the early stages of
their career to the seasoned banker, to be inspired and
invigorated with new ideas and strategies to achieve
and succeed in this great industry of banking. n

Issue 2. 2019                                               13
Introducing Yext, The New Way to
     Put Your Financial Institution on the Map
     By Rachel Scheuerman, Director - Engagement Solutions, Harland Clarke

     P
           icture this. An account holder recently posted a glowing      •     Yext® App Directory extends your information in Yext
           review of one of your branch managers. She raved about              Knowledge Manager with ready-made integrations to the
           how incredible the customer service was when she came               platforms and processes you use every day.
     into the branch to replace a damaged debit card. Stellar re-
     views like this one are something you want to share with your       Harland Clarke and Yext Partnership Benefits
     team, employees, current account holders and consumers in a         The Harland Clarke-Yext partnership combines over 140 years
     meaningful manner.                                                  of financial experience with a best-in-class technology solution.
                                                                         As a preferred partner, Harland Clarke has teamed with Yext
     Say hello to Yext®                                                  to help you navigate Yext’s many resources, conduct regular
     With Yext you can get the right information to the right audi-      business reviews and optimize your location strategy.
     ence at the right time. In addition, Yext empowers you and your
     team with the ability to share a great new account holder expe-     Harland Clarke’s deep understanding of the financial services
     rience across the web and on Facebook, promote time-sensitive       industry ensures you have a dedicated partner available to pro-
     marketing campaigns and ensure you’re discoverable when             vide strategic assistance with implementation, content strategy,
     prospects search “loan near me” or “new credit card”.               and coordination with other Harland Clarke Marketing Solu-
                                                                         tions as well as ongoing support.
     With Yext Knowledge Engine, you’ll have centralized control to
     efficiently manage all public facts about your brand — branch       Other benefits of the Harland Clarke-Yext preferred part-
     and ATM locations, personnel information, open hours, holiday       nership include:
     closings, driving directions, customer service contacts, products
     and promotions — across the web from one centralized location.      •     Personalized onboarding for your financial institution
                                                                         •     Integrated approach to enhance marketing programs
     Discover the many ways Yext puts you in control of your brand:      •     Strategic consulting designed specifically for financial
                                                                               institutions
     •   Yext® Knowledge Manager — it all starts here — a cen-           •     Early access to new Yext products
         tralized database and single source of truth for all of the     •     Eligibility for participation in exclusive beta programs n
         facts about your brand.                                             For more information contact Lindsay Scott at 801-214-7720 or
     •   Yext® Pages makes sure these facts are correct and com-             lindsay@uba.org.
         plete on your website.
     •   Yext® Listings ensures that you have control over how
         you’re represented on third-party sites, apps, and platforms.                          Rachel Scheuerman
     •   Yext® Reviews helps you manage what consumers are
         saying about you online, to ensure your brand is represented
         accurately anywhere potential account holders are searching.
     •   Yext® Analytics sits alongside all Yext products, giving
         you a complete picture of how consumers are interacting
         with your brand online and how those interactions influ-
         ence your business.

14                                                                                                                                     www.uba.org
Issue 2. 2019   15
111th Annual Utah Bankers

     T
          he 111th Annual Utah Bankers Association Convention           Forge. Dr. Pamela S. Perlich, Director, Demographic Research,
          was held at the Sun Valley Resort in beautiful Sun Valley,    Kem C. Gardner Policy Institute David Eccles School of
          Idaho June 23-26. Over 350 bankers, guests and business       Business, provided attendees with a view into our demographic
     partners attended the event.                                       future in Utah. Dr. Perlich was followed by Laurie Stewart,
                                                                        ABA Chairman-Elect, who gave attendees an update from
     The event kicked off with an active and busy exhibit hall which    Washington. Followed by an FDIC update from Kathy Moe,
     hosted a wide range of business partners in forty booths. Bank-    Regional Director, FDIC.
     ers and families alike enjoyed the fun and inviting atmosphere
     while business partners had the chance to visit with bank execu-   The participants were then able to choose who they would like
     tive management and key decision makers.                           to listen to during the breakout sessions. The first breakout
                                                                        session featured three amazing speakers. Dale Sheller, Senior
     On Monday, bankers were provided with a fascinating outlook        Vice President, The Baker Group spoke to his group about asset
     on the digital age, from JP Nicols, Managing Director, FinTech     liability management in today’s environment. Philip K. Smith,

16                                                                                                                       www.uba.org
s Association Convention

  Issue 2. 2019            17
Gerrish Smith Tuck, PC, spoke to a group about creating value   bankers were recognized with 40 Year Service awards and the
     for your organization. Meanwhile Dr. Pamela S. Perlich spoke    retiring UBA board members were recognized. As the sun set
     once again to a group of attendees about the economic outlook   on a beautiful Sun Valley day, attendees were entertained by the
     for Utah.                                                       talents of music sensation Three Dog Night in the Sun Valley Pa-
                                                                     vilion, sponsored by Zions Bank Correspondent Banking Group.
     The final breakout session had a group of attendees learning
     about privacy law from Tsutomu Johnson, Partner, Parsons        On Wednesday, the closing business session continued the su-
     Behle & Latimer. Another group had a conversation with          perior agenda, featuring Dr. Lindsey Piegza, Chief Economist,
     the Commissioner, Ed Leary, Utah Department of Financial        Stifel Fixed income. Dr. Piegza shared her knowledge of today’s
     Institutions. The third group got to hear from Shahab Saeed,    economy. Then, Dave Forsyth, chairman of the Emerging Bank
     Westminster College, about the Role of Leaders. Following the   Leaders provided the annual EBL report. The convention was
     breakout sessions on Monday afternoon, bankers and their fam-   wrapped up with an inspiring presentation by bestselling author
     ily members gathered for the always popular Bingo. Over 500     Dr. Craig Manning. The UBA convention continues to be a
     individuals joined in on the fun.                               family banking tradition which provides the perfect venue for
                                                                     networking, business and relaxation. Mark your calendar for
     On Tuesday, after a day of recreation, Chairman Doug DeFries    next year’s event, the 111th Annual UBA Convention is sched-
     hosted a Chairman’s reception and dinner. After dinner, seven   uled for June 28- July 1st in Sun Valley, ID. n

18                                                                                                                      www.uba.org
CECL Solution
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• Simultaneous support of all CECL methods          • PCBB experts help you every step of the way

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                                Learn more: http://bit.ly/UBACECL
TOP 5 CECL THINGS TO REMEMBER
     By Jeff Goldstein SVP, Regional Manager, PCBB

     A
            s you are putting the finishing               one method. So, how will you know
            touches on your strategic planning,           if you choose the right method?              needed? How will they continue to
            CECL is likely on the top of your             You will need to see the reserve             support you after implementation?
     mind. There is a lot of information to dis-          results before you make a decision,          These are all important questions as
     till and many questions that arise. To help          of course. This means gathering the          you do your vendor due diligence.
     you check some key questions off your                data and running it through multi-
     list, you will want to review the Top 5              ple methods to see the best results.    5.   Last, but not least, don’t forget that
     Things to remember as you look towards               One method does not necessarily              you will need to run ALLL and
     the imminent deadline.                               fit all portfolios. To save you time         CECL in parallel for a period of time.
                                                          down the road, make sure you take            This is to ensure that you have cap-
     1.   First of all, CECL is not going away.                                                        tured everything needed, and there
                                                          this time upfront to find the best
          There are many financial institutions                                                        are no hiccups in the transition. How
                                                          method(s) by testing a variety of
          still sitting on the sidelines hoping                                                        long should they run in parallel? Since
                                                          them prior to your selection.
          that it will not happen. There are lots                                                      reporting is quarterly, you should run
          of excuses as some uncertainty still       3.   If you haven’t already, talk to your         it four times or for one year. So, clear-
          exists. But, let’s face it – the chances        accountants and regulators about             ly, you won’t want to postpone CECL
          of CECL going away are close to                 CECL. These experts and others               implementation any longer. n
          nil. I don’t know many bankers that             will be able to help keep you on
          would place a bet on those odds. So,            course and could provide you with
          you won’t want to put your bank on              gap areas still needing attention.
          a shorter implementation timeline               Starting the conversation with them                          Jeff Goldstein SVP,
          because of those odds. As a reminder,           early in the process will ensure suc-                        Regional Manager
          this rule is not just for banks, but for        cess down the road.                                          Phone: (415-517-1012)
          all companies. Just because there are                                                                        jgoldstein@pcbb.com
                                                     4.   As you review possible CECL ven-                             www.pcbb.com
          challenges for banks doesn’t mean
                                                          dors, have a robust discussion with                           Dedicated to serving the
          that FASB will rethink CECL.                                                                                  needs of community banks,
                                                          them about implementation. What                               PCBB’s comprehensive
     2.   Remember to think of your entire                does this mean for each one? Can                              and robust set of solutions
                                                                                                   includes: cash management, international
          portfolio – including securities –              you compare the different methods        services, lending solutions and risk management
          when you are looking for a solution.            before choosing more than one?           consulting services, including CECL.
          With a diverse portfolio of products,           What resources do they provide? Can
          you could very likely need more than            they help you with external data, if

20                                                                                                                                 www.uba.org
Issue 2. 2019   21
Relief for Community Banks in the
     Competition for Deposits
     By Bryan Harper, Regional Director at Promontory Interfinancial Network, LLC

     An important reform of the rules governing reciprocal deposits will make it easier for
             community banks to compete for the business of large depositors.

     T
           he recent bank reform bill made a lot of news, but what         “We think the change to reciprocal deposits is great,” says
           may surprise you is the specific provision of the Economic      Christopher Cole, executive vice president and senior regulatory
           Growth, Regulatory Relief, and Consumer Protection Act          counsel for the Independent Community Bankers of America.
     that community bankers believe will have the biggest impact on        “It clarifies the status of reciprocal deposits and alleviates the
     their daily business.                                                 concerns many community banks had about using them.”

     Before the bill became law, a lot of attention was placed on the      Similarly, the American Bankers Association noted that, “the
     provision raising the systemically important financial insti-         definition of brokered deposits needs to be modernized and
     tutions, or SIFI, threshold from $50 billion to $250 billion in       we appreciate that Congress took a first step by recognizing
     assets, above which banks must contend with a heavier compli-         reciprocal deposits are a stable source of funding for many
     ance burden.                                                          community banks.”

     Yet, the provision involving SIFIs directly impacts only a small      The change in the law makes sense, says Neil Stanley, president
     number of commercial banks based in the United States – the           of community banking at TS Banking Group, which owns three
     dozen-plus with between $50 billion and $250 billion in assets.       banks, including Treynor State Bank, a $400 million bank based
                                                                           in Treynor, Iowa: “This is one of those areas that reflects what
     Perhaps that’s why when Promontory Interfinancial Network             bankers always thought was true – when a large, local depositor
     queried bankers for its second-quarter Executive Business             does business with us, any deposits above the $250,000 FDIC
     Outlook Survey, executives from the 390 banks that responded          insurance threshold shouldn’t be considered brokered or highly
     pointed elsewhere when asked to identify the law’s most impact-       volatile just because we place them with other institutions on a
     ful provision.                                                        reciprocal basis.”

     Thirty-seven percent of respondents said the law’s provision that     Underscoring the significance of the change, 58 percent of
     allows most reciprocal deposits to be treated as nonbrokered          respondents to Promontory Interfinancial Network’s survey
     deposits ranked highest on a scale of one to five, placing it first   said they plan to start using, or expanding their use of, recip-
     among the seven other provisions tested.                              rocal deposits immediately or very soon because of the new
                                                                           law. An additional 29 percent said they would consider doing
     It was up against stiff competition. The other provisions includ-     so in the future.
     ed those that eased the qualified mortgage rule, extended the
     regulatory exam cycle and simplified capital rules for communi-       To put this in perspective, according to the same bank leaders,
     ty banks, among others.                                               the next most impactful provision included in the new law

22                                                                                                                            www.uba.org
relates to the easing of rules surrounding commercial real estate    By making it easier for community banks to use reciprocal
loans, followed by the provision that shortened call reports and     deposits, in turn, the new law strengthens their ability to grow
then by the provision that provided qualified mortgage relief.       relationships and deposits from a local customer base without
                                                                     losing either one to bigger banks with deeper pockets.
The change in reciprocal deposits may seem like a peripheral
issue, but it addresses a fundamental inequity in banking. It        “This is a step in the right direction,” says Bert Ely, a princi-
does so by helping to level the playing field between the handful    pal of Ely & Company, where he monitors conditions in the
of large, money center banks headquartered in places like New        banking industry. “It makes it easier for community banks to
York City and the thousands of smaller banks spread across the       accommodate large depositors.”
country that serve as economic lifelines in their communities.
                                                                     Given all this interest, it seems likely that the use of reciprocal
Institutional investors have often favored big banks because of      deposits will increase in the coming months and years. Banks
the belief they are “too big to fail.” And since they have more      not currently familiar with them would thereby be wise to
resources to invest in mobile and online banking technology, big     familiarize themselves with how reciprocal deposits work and
banks have become magnets for deposits from the new genera-          their benefits. n
tion of digitally savvy consumers. These banks no longer need
to rely as heavily on building branches in rural communities
to compete with community banks for funding; they can now
reach small-town customers through their smartphones.                                   To learn more about reciprocal deposits and the impact
                                                                                        of the new law, contact Bryan Harper at bharper@
                                                                                        promnetwork.com.
As such, many of the nation’s biggest banks are reporting
organic increases in deposits. And the competition on the
funding side of the balance sheet will only intensify as interest
rates climb. The Federal Reserve’s Open Market Committee has
raised the fed funds rate multiple times this year and is expected
to continue doing so.

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Issue 2. 2019                                                                                                                                    23
BANK KUDOS
     BANK OF UTAH

     Bank of Utah Wraps Up a Successful “Kick Childhood
     Hunger” Food Drive
     Seventeen Bank of Utah branches and mortgage offices collect-
     ed more than two tons of food for the bank’s annual “Kick
     Childhood Hunger” food drive in May. Bank employees,
     customers and friends dropped off non-perishable foods and the
     bank delivered those donations to 11 local food pantries to feed
     hungry kids at school and at home.

     Students from Summit Elementary in Logan and Lakeview
     Elementary in Brigham City collected food at their schools as
     part of the Kick Childhood Hunger effort. Charitable organiza-
     tions receiving donations include:
     •    Cache Community Pantry - Logan
     •    Tremonton Community Pantry - Tremonton
     •    Box Elder Community Pantry - Brigham City
     •    Joyce Hansen Hall Food Bank - Ogden
     •    Ogden-Weber Community Action Partnership (OWCAP)               The public was invited to attend an open house that day. Bank
          - Ogden                                                        of Utah also opened three new branches this spring in Lindon,
     •    Bountiful Food Pantry - Bountiful                              Provo and Heber City.
     •    Crossroads Urban Center - Salt Lake City
     •    Peace House - Heber City                                       BRIGHTON BANK
     •    Community Action Services and Food Bank - Provo
     •    Carbon Caring for Kids - Price                                 Community Shred Day
     •    Switchpoint - St. George                                       Brighton Bank held its annual Community Shred Day on April
                                                                         18th and 19th, 2019. Bank customers and community members
     “One in six children in the U.S. suffer from food insecurity, and   were invited to bring documents and other items with sensitive
     we as a community bank wanted to do our part to help feed kids      information to shred at the Cottonwood and South Salt Lake
     in our communities,” said Bank of Utah President Douglas L.         offices. Brighton Bank’s goal for this annual event is to provide a
     DeFries. “We’re grateful to our great customers and neighbors       service to the public by providing a way to keep confidential in-
     who donated.”                                                       formation and records from falling into the wrong hands as well
                                                                         as being a convenient means of discarding old documentation.
     Bank of Utah Opens New City Creek Banking Center
     Bank of Utah and Salt Lake Chamber dignitaries gathered for a       Millie’s Princess Foundation Run 2019 At Daybreak
     ribbon cutting to officially open the bank’s new City Creek
     Banking Center at 50 South 200 East, Social Hall Plaza in Salt
     Lake City, on May 23, 2019.

     The new branch features a depository and financial experts to
     serve in commercial and mortgage lending, corporate and
     personal trust, wealth management, investments and private
     banking departments. According to Roger Christensen, Bank
     of Utah’s Sr. VP of Marketing, “Our move to Social Hall Ave.        This year’s Millie’s Princess Run was held at Daybreak in South
     will put us right in the heart of downtown and help us better       Jordan on June 15, 2019. It was as fun filled day of family
     serve the growing number of people who work, live and shop in       friendly fun! As in year’s past, they held a 2K and 5 K run,
     downtown Salt Lake City.                                            bounce houses, face painting, water walkers, a climbing wall,

24                                                                                                                            www.uba.org
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